Norwich ice cream maker, Mini Melts, revs up for Wal-Mart partnership

Norwich - The nondescript Mini Melts factory, tucked away in back of a city highway department building off Asylum Street, has been quietly churning out millions of cups of the beaded ice cream product over the past year.

Now production is about to go into high gear, with the company expanding from 30 employees to 50. After all, ice cream season is approaching.

But it's more than that.

Wal-Mart has come calling as well.

"I believe the reason we got the Wal-Mart account was the quality of our product," Shawn Kilcoyne, Mini-Melts USA Inc.'s Philadelphia-based chief executive officer, said during an on-site interview. "Mini Melts is the premium choice in beaded ice cream."

A lot of competitors in the cryogenically frozen ice cream market that Mini Melts inhabits offer products with 10 percent butterfat. Kilcoyne said his ice cream is 14 percent butterfat, which gives it a distinctive rich, creamy flavor.

Mini Melts hasn't officially released news about its new contract with Wal-Mart Stores Inc., which is expected to be announced Monday. But Kilcoyne was happy to talk about the deal during a tour of the 25,000-square-foot factory as workers with white hairnets and smocks moved ghostlike in a large, chilly production area where freezing ice cream combined with room temperature to create a subtle fog.

Just two machines are used to place Mini Melts into the distinctive cups that are dispensed in vending machines nationwide, and another large contraption mixes up the ice cream using a cryogenic process involving liquid nitrogen.

The multicolored Mini Melts, in flavors that include cookie dough, cotton candy, banana, strawberry, chocolate and vanilla, also come in larger containers, suitable for kids' parties.

Mini Melts USA - not to be confused with Mini Melts Inc., still controlled by company founder Tom Mosey of Mystic, who retains the ice cream patent and the building - has been pursuing a deal with retailing giant Wal-Mart for a couple of years, said Kilcoyne. He and brother Dan own the manufacturing and distribution rights to Mini Melts in the United States.

Wal-Mart finally agreed to a test run using Mini Melts vending machines in 160 stores and a dozen states, and the results were impressive, Kilcoyne said, spurred by a price about half what customers were used to seeing at amusement parks. The product, flash-frozen and shipped using dry ice, is kept in factory freezers at 40 degrees below zero, and the ice cream melts quickly at room temperature.

"It's a fun product," Kilcoyne said. "But you have to eat it there. You can't take it home with you."

The devices have been placed next to Red Box video dispensers at the Wal-Marts where they have been tested, and Kilcoyne said the pairing will continue during the upcoming rollout.

The product is being introduced in most of the more than 5,000 Wal-Marts around the country starting next month - but for now only in stores such as Lisbon Landing that don't contain a McDonald's restaurant, Kilcoyne said. He wouldn't specify exactly how many stores are involved, but said the company hopes to add Mini Melts in well over 1,000 other Wal-Marts if the restriction involving McDonald's is lifted.

But even without a full Wal-Mart rollout, he said, the additional business will mean expanding from one to three shifts at the factory, adding new machinery and increasing the amount of automation. He expected job numbers at the factory could triple to 100 in the coming year or so, and said the extra distribution will likely mean annual layoffs that occurred in the slow December-to-March period could largely be avoided.

Kilcoyne wouldn't quantify the effect of the Wal-Mart contract on his business. But he did say the company wants to ensure that Mini Melts avoids becoming too reliant on any one customer - chiefly by trying to move aggressively into new markets.

The company is making a big push in Florida, arranging for vending machines to be installed in close to 300 new sites.

Mini Melts distributes to all 48 of the contiguous United States. Before Wal-Mart, its main distribution points were amusement centers, zoos, malls, theme parks - basically any place that attracts large numbers of children and young adults.

Mini Melts vending machines, produced by Danbury manufacturing company Fastcorp LLC, are being assembled as quickly as possible to facilitate the Wal-Mart launch. Kilcoyne said the company expects to have 25,000 machines in place within the next three to five years.

Kilcoyne said he and the rest of the leadership staff at Mini Melts has been heavily influenced by Walt Disney's philosophy of "if you dream it, you can do it." Kilcoyne and his younger brother started selling ice cream while in high school, and they went on to build a thriving Mini Melts business in the Philadelphia area before taking on the distribution of the product nationwide just three years ago.

Charlie Hannah, vice president of business development for Mini Melts USA and a boyhood friend of Kilcoyne, said the impressive thing about the company's top brass is that they never sit on their laurels. They are always trying to make improvements, even when things seem to be going well, he said.